The rate at which Panasonic is supplying batteries to Tesla remains the “fundamental constraint” on Tesla product production, reports The Verge.
Tesla said it needs more batteries from the Panasonic-operated production lines at Tesla’s Gigafactory in Reno, Nevada to keep up with the rate at which the company hopes to produce electric vehicles and its home power storage products.
Panasonic and Tesla signed a deal in 2014 to bring the production of Panasonic batteries for Tesla products to Tesla’s own Gigafactory – which opened two years later.
This deal was meant to reduce battery production costs to levels “previously unobtainable in battery cell and pack production”.
However, Panasonic has reportedly suffered substantial losses due to slower-than-expected attempts to increase Model 3 production.
As a result, it was recently reported that Panasonic would be cancelling a planned investment in the Gigafactory, which was expected to amount to between $900 million and $1.35 billion.
However, Tesla has denied this report, claiming that both Panasonic and Tesla continue to invest substantial funds into the Gigafactory.